True for gold too, yet that bubble manages to be pretty stable over the decades.

I mean, it depends on your definition of "stable"? The yearly deltas in the price of gold between 2009 and 2015 are +31%, +8%, +9%, -28%, 0%, -12%. It's stable relative to, say, BitCoin, but if my salary changed that much I'd hardly call it "a stable income", and if my weight changed that much I'd definitely not call it "a stable weight".

If there is a fool born every minute, and we have 10 minute blocks, then this can continue ad infinitum and therefore produce a great medium of exchange and store of value. It is like a better version of Hawala. If this is the case, then it would appear to be that the greater fools are the ones holding onto a depreciating currency.

If you look at the graph from Stocks For The Long Run it's been about the most constant thing in value over a 200 year time frame http://www.pacificinvestmentadvisory.com/graphics/stoxGraph....

I daresay constant is not great. Goes up is better.

That graph is kind of meaningless since gold was pegged to the dollar pre-1970s. Well, vice versa.

To some extent though it illustrates that after 200 years the value of $1 of gold was something like $1 in real terms while the value of a paper dollar became 6 cents. Even if that only kicked in after the 1970.

It's not actually true for gold. The market is supported by non fools buying jewelry.